Customer tweets show customers were frustrated by website errors, faulty coupon codes, and other common customer struggles.

With these issues plaguing their online experience, “retailers are unwittingly driving customers away resulting in more than $44 billion in lost revenue over the course of a year,” said Geoff Galat, vice president of Worldwide Marketing for Tealeaf.

What I want to know is: How many merchants are LISTENING intently to this active feedback—to respond, reach out, and resolve these issues their customers are putting out there?  With online shopping in full swing this season, and with customers’ megaphones firmly implanted in their hands tweeting out their experiences, this season will show the difference between a company who just wants to sell stuff and one who wants to build relationships. (Previous Tealeaf research revealed that 51% of online shoppers said social media has influenced their online transactions.  And 74% of surveyed consumers said a negative online comment influences their likelihood to do business with a company.)

Has anyone out there tweeted about an experience and then heard back from a company to resolve their issue?  If you are a merchant, is “active listening” and responding to customer issues a skill and a practice you are putting to work?  It will show your true colors, and it will grow your business.

PlantBottle technology is still fairly new, and Coca-Cola took the early lead in using it for its soft drinks. Expect more companies to follow suit as suppliers seek sounder packaging alternatives to petroleum-based plastics made from plant-based polymers, including CPG giant Procter & Gamble.

Not only is the new packaging 100% recyclable, it also reduces the company’s use of nonrenewable resources, cuts CO2 emissions substantially, and is expected to save approximately 400,000 gallons of gas. All of this according to a recent Greener Package newsletter article.

Odwalla president Alison Lewis says, “Plants do such a good job of making our juice, Odwalla hired them to help make our bottles. Doing good things for the community and building a business with heart are core guiding principles of Odwalla’s vision.”

The beauty of PlantBottle packaging:
• The plastic-like material comes from molasses and sugarcane juice.
• It looks like and performs as well as traditional HDPE and PET bottles.
• It can be endlessly recycled.

Naturally derived, sustainable packaging makes sense for natural and organic brands. For brands like Odwalla, packaging their juices in the PlantBottle is consistent with the company’s core values. But what about Coca Cola or Procter & Gamble? Is it as important to their brand values?

There’s no disputing that cutting down on nonrenewable resources, cutting harmful emissions, and coming up with totally recyclable polymers is desirable from an environmental and PR point of view. But do the consumers of these big brands care as much as an Odwalla customer about packaging? How much does it matter when these customers are making purchases?

What do you think?

I’d love to hear from you.

When you think about all of the strides consumer product companies have made in recent years, you’ve got to wonder why. I mean think of it: greener product components, greener packaging, more reusing, recycling and repurposing than ever. What’s the problem?

Could it be that a weak economy is bringing consumer issues with environmentally friendly products to the surface now? Seems so.

The surveys cited uncovered the following:

• Consumer perception that green products are priced higher than conventional ones.
• Consumer perception that green products may not work as well as conventional ones.
• Fewer sales by green companies make it less likely consumers will try their products.
• Most consumers like the idea of doing their bit to help the planet. But their first priority is: What will the product do for me?

For more details from the surveys, please read the Brandweek article.

These findings are very telling. They point out a crucial fact: Companies need to engage in educating the public about their products more intensively, or, as the article succinctly points out: “risk skepticism or irrelevance.” That according to M.J. Jolda, SVP of marketing for Marcal Small Steps.

How true. Green product marketers must change perception. No easy task. They must consider offering periodic sales to encourage consumers to try their products. Lastly, they must educate consumers about the efficacy of their products; how the price is either in the ballpark with the rest of the category, or slightly higher for real and substantive reasons that make sense. Lastly, they must prove to skeptical consumers that using their products will make a demonstrable difference.

All of the claims and education in the world won’t have a big impact until the economy turns around. But, it seems to me, this is an opportune time to launch a new effort aimed at educating and telling a compelling story.

Questions:
• What do you think of the Green Gauge survey statement that 52% of respondents agreed with: “First comes economic security, then we can worry about environmental problems”? Do you agree?
• Can we balance our economic needs with environmental concerns, even during trying times?
• Do you think this points to a larger problem, regardless of the economy? Are consumers less concerned in reality, than they say they are about the environment?

I’d love to hear from you.

Your results may vary? In other words, I’m a real sucker if I buy your product based on its inflated implied promises.

Change one word, and you’ve uncovered one of the ingredients in the magic sauce of marketing.

Your results will vary.

Why should I buy your product, or pay for your service? Simple: I’m not getting the results I want. I want different results.

I’ll buy what you have to offer if my results will vary!

We recently converted and updated our household phone strategy to include a mix of iPhones and iPod touches, instead of various models from different manufacturers. Why? Two words: simplicity, and consistency. We’ve tried a mix of mobile devices and carriers. The result was a confusing array of stuff that didn’t all work the same way. I craved a different result. Including the fact that now my 16-year old can take over mobile device technical support for the family. (Hey—I’m not as dumb as I look!)

Inertia means that many potential customers will stick with the devil they know, even if it is less than ideal. What is the different result they crave enough to change? In your marketing, in the span of 15 to 30 seconds, can you clearly articulate how and why my results will vary?

If you offer no real change, why should I change? But if my results will vary, you’ve got a shot at making me a customer.

In one case, it was a local restaurant that made an anniversary extremely memorable. In the other, it was a hotel/resort that redefined “above and beyond” in my book.

Both of these examples involved personalized notes.

I’ve been to countless restaurants and an abundance of hotels, and very few have been remarkable enough to be … well, remarked on in writing. I expect good service and am disappointed when it fails to occur. I am quite pleased with excellent service. But it’s time to think about providing remarkable service that is—to be perfectly tangible—blog-worthy.

For a customer to go home, and freely and happily take the time to publicly praise a person or a company’s service, is an exceptional affirmation. It is also about the best marketing you’ll ever get. It won’t cost you advertising dollars. It’ll cost you rigorous hiring practices, great training, and cultivation of an exceptional work climate.

What it will earn you is all kinds of repeat business and glowing recommendations. Worthy ROI, in my book.

Perhaps every service organization should sit down with employees and say, “We need to treat EVERY SINGLE GUEST as if they have an influential blog, and assume they’re going to write up their experience tomorrow.” Because the fact is, some of them do—and will.

Don’t just pursue good customer service. Shoot for blog-worthy service. That’s social media marketing at its strongest.

The goal is the  Japanese concept of “umami”—not only flavor, but an “explosion of flavor” that leads to a much deeper, more memorable experience.

Americans have been more experimental food-wise, craving more boldness and much less blandness. An influx of ethnically diverse people, international cuisines and The Food Network, and other influences, continue to expose consumers to exciting new options—and they’re eating it up. Pun intended.

A few examples:
• Frito-Lay’s new Doritos chips flavors (First, Second and Third-Degree Burn) offer jalapeño, buffalo and habanero flavors.
• McCormick & Co. offers more exotic spices  now, such as dried lemongrass, roasted garlic, smoked paprika and sea salt. The company says that Americans now keep 40 spices on hand on average. Asian and Caribbean spices, blends and marinades are now available in every supermarket.
• Wrigley, long known for its staid Doublemint, Spearmint and Juicy Fruit gum, has been introducing a dozen new flavors per year. The fall of 2010 will see the launch of Extra gum in dessert flavors like key lime pie and strawberry shortcake.
• Dr Pepper Snapple has added Latin-inspired fruit punch and mango flavors to its Venom energy drink line.

As with everything else, this trend has implications.
• Will consumers be satisfied or will they continue to crave ever bolder food and beverage choices?
• Will continued exposure to such strong flavors dull our taste buds to simple, natural flavors like those of fruits and vegetables?
• Will we seek balance—as Asian cuisines do—between sweet, sour, salty, bitter, hot/pungent? Or will we overpower in one way or another?

So what do you think?
• Do you believe food/beverage companies are going too far?
• In their haste to drive new products to market, are they pushing too fast with too many new items to try to outdo each other? To achieve differentiation?
• Are their innovations creating exciting new options, or too many confusing choices for consumers?

I’d love to hear from you.

The brewer apparently saw unit sales drop by 1.7% last year, but it is planning to counter that along with competition coming from Anheuser-Busch with product innovations and new advertising spends. Its first big idea: a new bottle designed with interior grooves.

Pouring the beer out creates the appearance of a “vortex.” With advertising support behind the new bottle, and the tag “great pilsner taste,” MillerCoors is likely to get some interest here.

Other innovations are: the 16 oz. Coors Aluminum Pint and a Coors Light Cold Activated Window 12-pack. The cans in brand signature silver feature the iconic mountain range in thermochromatic ink. The ink turns blue when the cans are chilled to the ideal temperature for consumption. These innovations will likely be advertised.

Some might say that an interesting pour and color magic will get you just so far. But here’s my take: Packaging does a lot to enhance—or detract from—customer experiences.

In fact, researchers say that at least 70% of the time consumers make final purchase decisions right at the shelf. That just goes to show how important packaging is to the decision-making process. When consumers opt to purchase a product, and packaging has helped seal the deal, we refer to that as “the first moment of truth.”

Then, when customers actually engage with the packaging as they use the product, a “second moment of truth” unfolds. If packaging heightens the user experience in some way,or makes the product more memorable, it’s likely consumers will purchase it again. In fact, it’s much more likely the brand and product will become the one of choice.

So maybe creating a vortex in a bottle isn’t so far-fetched. Maybe packaging that changes color to indicate ideal drinkability isn’t either.

Questions:
• Do you think these new packaging innovations are just marketing gimmicks or do you think consumers will see real value in them?
• Are there specific products you purchase because the packaging adds substantially to their value in some way? If so, which ones and why?

I’d love to hear from you.

In the book The Hummer and the Mini: Navigating the Contradictions of the New Trend Landscape, author Robyn Waters writes about how we humans have the desire to fit in and belong to something (a family, organization, club, etc), yet at the same time want to stand out as unique individuals.

“Many companies get in the trap of trying to identify one right answer to the question ‘What will be the next big thing?’ when there may not be only one best method or one optimal approach.”

Waters suggests success may lie in abandoning black-and-white thinking and focus on the gray area … the “space in-between” where the contradictions are. When it comes to product and service offerings, “we are no longer content just to choose. We want to partake and make.”

Examples in the book include:

• The ability to customize your own car beyond the standard exterior and interior colors. The Mini Cooper, Build Your Own Scion
• Customize your own Nike shoes, using NIKEiD (Four years later the trend grows; Converse and Adidas now allow you to create your own shoes.)

I would also include web-based custom print t-shirt sites. Users upload artwork and items are printed on demand. A smart example is, Skreened. They not only offer this printing on demand, but stand out with “ethical custom apparel … Environmental shirt-printing methods with fashionable and ethically made American Apparel brand t-shirts.”

So how do you think about your brand, products and services this way?

Break It Down: Made To Order

Customization requires you to re-think your assembly process,  not necessarily re-build it.

In the sneaker example, a standard sneaker style is assembled limited to only the handful of required/standard components. With customization, now the assembler has access to all the standard components.

Instead of making hundreds of the same shoe with limited ingredients, now they follow the customer recipe with access to all the ingredients.

More labor intensive, yes. However, users are willing to pay more and wait 2 to 4 weeks to get their tricked-out sneakers.

IKEA has done a brilliant job of allowing customization by breaking down its products. IKEA sells products unassembled anyhow. So building costs aren’t even part of its model.

IKEA does a stellar job of planning ahead and designing elements to be interchangeable. For example, its cabinets bases are a standard size and accommodate nearly any combination of sliding drawers and/or doors, laminate and wood finishes, pulls, knobs, and trim. A single base cabinet can be configured in countless ways.

Cold Stone Creamery broke it down. Instead of offering off-the-shelf (potentially boring) chocolate chip ice cream, Cold Stone ships chocolate ice cream and chocolate chips as separate components to their locations. The customer gets to choose their own combination and it gets smooshed together right in front of you on the marble slab. Delis had been making sandwiches to order for years, why not ice cream to order?

Department stores, years ago, started selling lamp bases and lamp shades separately. Instead of forcing you to choose the style combination created by the company, they let the consumer choose. Whaddya know … I bought the $25 shade instead of the $10 basic shade and the company made ten more dollars on my purchase.

What products and services do you offer that could be broken down to allow customization by your customers. What can you do to allow them to be part of the gang, but stand out as individuals?

Vendors and Consultants Bill of Rights

1. When we take the time to prepare an RFP or quote for you, we’d appreciate a response, even if it means that you don’t want our products or services. We often take a considerable amount of time to work these out with YOUR needs in mind, so please be fair and reply when we call or e-mail to follow up. This is about courtesy, not just the cost of doing business.
2. Please advise us if you plan on getting umpteen other proposals or quotes. It’s only fair that we know in advance whether we are the only company bidding on your business or if we are competing with many others. That way, we can evaluate whether it is worth our investment of time and effort to join the throngs of others and whether we believe that we have a shot at earning your business.
3. Please consider lead times whenever time allows. Products may be backordered or take time to fulfill and ship, and services often need to fit into schedules and have a strategy or outline developed. We want to exceed your expectations, so last-minute requests put us at a disadvantage. You want us to look forward to your calls, not dread them, even if we smile and never show our disdain.
4. Expect us to ask you lots of questions, if it’s appropriate. That way, we ensure that we’re getting things right and there are no misunderstandings. Better yet, be open to a written agreement for our work, whether by e-mail or a signed document. That way, both sides are clear on the delivery and outcomes.
5. We want to partner with you, not just serve you. We welcome dialog and conversations that allow us to get to know each other so we can anticipate your needs and give you our advice. We also value your direction if you have preferences. We can’t read your mind.
6. Be honest with us and communicate. If we disappoint you in any way, please tell us so we can set things right. Don’t just keep it in and then ditch us. Maybe there’s been some miscommunication, or others on your end that contributed to a misunderstanding. Of course, if we disappoint you too frequently, then it’s our fault if you decide to walk.
7. If you’re thrilled with us, refer us to others. There’s no better way to show your appreciation.
8. Please recognize that we are in business to make a living. We have the same responsibilities that you do and pay similar bills and overhead costs. When we offer you a fair price for the work we do or the products we sell, sure you have the right to go elsewhere if you find them for less.  But, cheaper doesn’t mean better. We value our relationship with you and will often give you added value in our time, research, business introductions, and special offers.
9. Please pay your invoices in a timely fashion. For those of us who operate small businesses, cash flow is essential to our daily operations. We find it uncomfortable to hound you for money. If you need to stagger your payments or pay by credit card, please let us know in advance and we’ll work with you.
10. Please give us feedback. If you like what we do, tell us. It never goes out of style to hear the words, “Thank you.”

If you have any more suggestions, or disagree with any of these, share!

Stepping off on a hike last fall in New Hampshire, I was overwhelmed by the sense that I was back home in New England. No matter that I’d spent seven years in Tennessee, and a quarter-century in New Jersey. I’m a Connecticut boy, and the New England woods are home. Driving in and around Mystic CT last week, the trees and stone walls and topography and houses all felt like … home.

How powerful can it be, then, for a brand to become a “home” brand. So much a part of your life, that you are not comfortable without it.

From day one, the iPhone became a home brand for me. I can’t imagine not using it daily. Google is a home brand, indispensable, every day. A particularly helpful blogger can be a home brand for you. As can a certain make of car. Or a brewer, such as Samuel Adams.

One of the signs that something is a home brand is that price becomes almost irrelevant. I barely even look at my AT&T mobility bill for the iPhone. I don’t even think about writing a check to Amica Insurance. Price is secondary because it’s … home. Part of the family. And, just as we talk about our family members naturally and eagerly, so we word-of-mouth our home brands without any effort.

We all have our home brands, and if we’re marketers, we all strive to BE one of those home brands. Undoubtedly, you have a home brand or two that come to mind — share them in the comments!

(Image credit)

It seems like more and more retail outlets are getting wise to the concept of marketing their own product insurance. And is this because they are thinking about you,  the customer? Doubt it. This additional revenue must add decent profit to the bottom line because many stores have incentive programs for their employees. The more insurance they sell, the more bonuses they make.

I can somewhat understand this concept when it comes to electronic, electric, and other goods with microchips or moving parts. It seems that appliances, computers, and other big ticket items just don’t last as long as they did in years past. But, my friends, get this. Have you ever heard of insurance on shoes?

When Sports Authority sold me a pair of New Balance tennis shoes in December of 2009, I declined to purchase the added insurance, which can run up to $16, depending on the cost of the shoes. That’s supposed to cover usual wear and tear for up to one year. Do they think I’m nuts?

Well, two months later, the shoelaces completely fell apart, so I went back to the store to ask for new laces. The manager took a look at my bill and reminded me that I hadn’t purchased the insurance and that the warranty was only good for 30 days without it. But … this time only, he’ll let me have a pair of new shoelaces (worth $2.49 in his store). Gee, what a pal. After exploring the Sports Authority website, I discovered that shoelaces are not even included in the warranty, so I’d be out of luck anyway. Besides, the floor sales rep handed me the wrong lace length after I showed him the shoes, so the replacement laces were useless.

But, the bigger picture here is … what happened to standing behind the products they sell? Has manufacturing gotten so bad that retailers need to add this insurance to protect themselves from the multitudes of returns? Shouldn’t retail buyers ensure that the products they buy match quality for price?  The guy in front of me at the store spent $155 on Nike runners and declined the insurance. If his shoes fall apart after 30 days, does that mean the store will tell him he’s out of luck for $155 shoes?

Why aren’t these retailers standing behind the products they sell and then dealing with their distributors or manufacturers after they look after their customers? If consumers continue to accept this practice and it becomes more commonplace, wouldn’t it make sense that more and more retailers will jump on the bandwagon?

So, what do you say? If you’ve paid for product insurance, do you think you got ripped off or was it worth it? If you didn’t, is it because you think it’s a rip-off or did you prefer to take your chances? Share, please!

Exit Realty is Growing: So what? What’s in it for me?

If your company is growing in some form or another, surely that makes you happy. However, how does boasting about your own growth help me? Why should that make me pick up the phone, or trust you above a dozen other outfits that are willing to post signs beating their own drum?

Speaking of picking up the phone, it might be a nice idea to have a phone number or website on your advertising, too. Just sayin’…

Then there’s the name. I realize that “exiting” is one aspect of moving, but perhaps a name that has more positive or aspirational connotations would be helpful? If there are two billboards side by side, one from Exit Realty and one from, say, Open Door Realty, guess which one is likely to receive a call?

I’m all for business growth, of course. And there’s a time, and a place, and a way to express one’s success. But if you’re about growing, focus on the customer. If you want to introduce yourself to me and entice my interest in a few seconds’ span, remove as many barriers as possible. You may be growing, but there’s something you ought to be knowing.

If I’m selling my house, it’s not about you!

I recently read an excellent post by Paul Dunay on Social Media Today presenting the 4 C’s of B2B marketing. We’ve known about the 4 P’s of marketing for years: Product, Price, Place and Promotion. Paul argues the 4 P’s are primarily a B2C mix. The 4 C’s, however, (Content, Connection, Communications, Conversion) illustrate the marketing mix for B2B. Sounds great, but how should B2B organizations implement the 4 C’s marketing mix into their campaigns? I would like to highlight an approach that has served our B2B agency very well: The 4 Pillars of a B2B Marketing Campaign.

We have found that the combined effectiveness of four key aspects of B2B Marketing determine the success of a B2B campaign: Insight, Strategy, Creative and Metrics (we call them pillars). Each pillar is essential in supporting the campaign, whether it be online or in print. One could argue that this holds true for B2C as well, however, B2C makes heavy use of media buying (TV, Radio, etc), a marketing strategy that B2B rarely requires.

Think of each pillar as a leg supporting a table. Short-cut or remove any leg and the marketing campaign either becomes very shaky, or it can completely topple over and crash to the ground. The four pillars provide a solid framework for mixing the right marketing activities in order to create engaging campaigns.

Not to be confused with the 4 C’s of B2B Marketing, the 4 Pillars are the critical stages in the life cycle of a B2B marketing campaign, whereas the 4 C’s are key the ingredients within a B2B organization’s annual marketing plan. During a 4 Pillar campaign, one must always check to ensure the 4 C’s are addressed accordingly at each stage.

Insight – Get The Right Ideas
All ideas start with insight, and all great ideas require great insight. Insight enables you to see and understand what your audience is all about, and marketing without insight is like marketing blind. Many B2B organizations make educated guesses at what they perceive to be the wants and needs of their customers. However, true marketing insight is generated through carefully considered interpretation of business intelligence and financial data. It’s the stuff that’s gathered through the process of analyzing market research, together with everything already known about the target market. It provides vital information and data that helps us craft killer ideas and creative ways to communicate to our audience.

Strategy – Get Integrated
Marketing in the B2B space is not like marketing to consumers. I love Paul Dunay’s analogy: if B2C marketing is a sprint, then B2B marketing is a marathon. Let’s face it. We are living in an age of information overload. It’s a noisy landscape. That’s why it is so important for B2B organizations to cut through that noise with integrated marketing that’s both strategic and creatively crafted. In the everyday bombardment of messages and tweets, it is pointless to hope to stand out and be heard without consistently engaging our audience. An integrated B2B marketing strategy helps organizations successfully connect with their customers because it helps them get branded, get online and get social in relevant and meaningful ways.

Creative – Get Experienced
Creativity is no longer just an embellishment to brand management. It has become a strategic imperative for creating killer content and a core driver of innovation and differentiation in a crowded marketplace. Creative thinking is drastically transforming online experiences by separating great content from mediocre content. Why? Because creating great content is hard. It’s not a creative writing or pixel pushing project. You can’t “just create something” out of thin air. Content creators know that great content involves so much more than “clever buzzwords” (if there is such a thing). Great content requires a balance between function and form, both written and visual, in order to deliver an experience that is both relevant and meaningful to the customer.

Metrics – Get Optimized
Planning and executing a marketing program is a good start, but how are the results measured? What’s working? What’s not? Accurate metrics involves consistent and persistent monitoring, measuring and adjusting along the way. The process becomes truly valuable when the right data helps make intelligent business decisions. A critical component to achieving the right data is testing. At Ad-Tech, last April, I learned that less than 30% of companies test their marketing. Those 30% saw their marketing ROI increase by more than 70%! That means the majority of companies rely on gut instinct and misinformation. No wonder marketing is perceived as an expense rather than an investment! When in doubt, test… and then test again, because testing illustrates what the customer really wants.

Thoughts?

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Achim Klor is the President and Creative Director at SterlingKlor Communications. Reach him at connect@sterlingklor.com.

The article: “Package-Good Players Plan New-Product Surge for 2010” states that some of the largest global consumer product companies “have said or signaled that they expect to step up new-product activity, and by extension, marketing support in 2010.” [Ad Age subscribers can access the article here. Non-subscribers can access it through BX Business Week here.]

These players include Procter & Gamble, Reckitt-Benckiser, Kimberly-Clark Corporation, Energizer Holdings and Unilever. Many retailers report they’re not seeing many new product launches yet. In fact, just the opposite, as manufacturers trim their product lines of under-performing items.

With sales flat to down in many categories, CPG companies have been reluctant to go to market with many new products of late. If anything, they’ve taken a defensive posture analyzing and lowering pricing where practicable. As a result, private label brand managers made inroads with new offerings, expanding SKUs and sales of their store brands.

National brands are beginning to respond. According to Nielsen Bases, “a dominant player in concept testing” for the consumer products industry, companies are beginning to spend market research dollars again in their new product pipelines. But, as we know, new product launches take time. Some industry analysts don’t see significant new products coming to market until late 2010. But others think manufacturers held promising new products back in 2009 due to the dismal consumer climate and are poised to position them in the marketplace.

Regardless, major CPG players have lost sales and market share to private labels so they’re likely to go on offense in 2010 to make gains and take back some of those losses. Of course for that to happen, new product launches will have to offer a bigger “wow” factor than recent introductions. That means branded products will have to offer true innovations to excite and entice consumers. Think about it: which new products can you recall being excited about lately?

Most telling at the end of the article: “But while 2010 may be a bigger year for innovation, it will probably be a lot bigger in developing markets than the U.S.” One senior package-goods executive said, ‘Focus will be skewed towards developing markets, as this is where he main battles will be and it is actually easier to innovate, as a lot can be leveraged from what has been done elsewhere.’”

What does that say about developed markets?

No matter what: buckle up, consumers and marketers. It’s going to be a bumpy ride in 2010.

Questions:

• Do you think CPG companies are right to launch innovative new products in spite of the slow economy? Or should they do it because of the economy?
• Can you think of any strong CPG product launches over the past year?
• If you’ve switched from some of your favorite brands to private label to save money recently, would you consider going back if innovative new products were launched?
• Do you think major brands can still grow in most consumer product categories, even in mature markets like the U.S.? Or do you think CPG companies should put most of their focus in developing markets?

I’d love to hear from you.

In the dusty and dry northern Indian state of Uttar Pradesh, farmers pray for rain. Ample rain means the difference between a bountiful harvest allowing farmers to sell excess crops and starvation. This year (2009) has been a particularly harsh year for drought, as the monsoon season has been “meager” with roughly 20% less rainfall than usual.

With sporadic rainfall, farmers must find a way to even out their cash flows and this usually means borrowing. However, the Reserve Bank of India cites, “more than half (of farmers) do not access credit from either institutional or non-institutional sources.”

Into the gap come micro-lending institutions; companies or entrepreneurs offering small loans to the poor. Loans traditionally range from $50 to $300 (USD) and sometimes more. While interest rates are usually quite high, the economics of risk management and defaults requires these loans to price in a premium.

Micro-lending can be quite profitable–with an average return on assets of 5%, yet the poor still must be educated as to concepts, value propositions, and contractual terms of these financial services. This is where marketing plays a role.

A WSJ article, “What Works and What Doesn’t Work in Rural Finance,” describes trials and tribulations of an Indian company attempting to set up the infrastructure to make micro-finance possible. Banking in remote regions like Uttar Pradesh isn’t as easy as setting up a branch with tellers and an ATM. In some places, electricity is scarce and dirt roads can be challenging to navigate. So the Indian micro-finance company had to take an alternative approach.

First, the micro finance company decided to build franchisees via a partner network. This was probably a very smart decision, especially since some of the risk of failure (and success) would be born by others.

Second, the micro-finance company had to overcome trust issues as only 59% of the adult population of India utilizes a bank account. Many of India’s poor would likely be very suspicious of anyone offering to loan them money. To counter this, the micro-finance company hired local individuals with the realization they would likely be better received into the community than new settlers to the region.

In so far as mistakes, the micro-finance company set up franchises with new kiosks and slick neon signs to create attention and attract visitors. However the neon signs intimidated the villagers and actually drove traffic away. The micro-finance company learned its lesson, dismantled the neon signs and instead created signage that used “traditional painting techniques used in village homes.”

Another mistake was to bring out slick marketing materials filled with financial jargon that most Western consumers expect. “We realized that (this approach) doesn’t cut ice with villagers,” one of the micro finance entrepreneurs noted. So the company provided the franchises with less flashy marketing materials that simplified the message.

As marketers, we can look at the successes and failures of this micro-lending roll out and chastise the entrepreneurs for not understanding the value of localization. But to be fair, how many of us (in the Western world) would have made similar mistakes?

It seems counter-intuitive, but as our flat world becomes more globalized and inter-connected, localization strategies will actually take on added importance. Marketers, as we push forward into new markets and emerging economies, we should leverage what we can in best practices and processes, but we should also realize one size will not fit all. In most cases, niche marketing–while time consuming and potentially costly (in the short term)–will drive higher returns on marketing spend.

Questions:

• India has 192 official languages, a very diverse geography, strong religious faiths, a caste system and two dominant opposing political parties. Is better segmentation and targeting the recipe for marketing success in India?
• Many of India’s poor don’t have access to credit, insurance, or savings. Do you see a potentially huge opportunity for financial services–not only in India but in other countries?
• Micro-lending has a goal to “improve people’s lives.” What lessons learned can Western Financial companies take away from this mission statement?

Related: 10 Questions for Muhammad Yunus

In a previous blog post, “Pursuit of the Authentic”, I noted that people are hungry for the authentic and are willing to pay any price to get it. That apparently goes for Hollywood TV producers who are searching for actors and actresses across the globe that haven’t been marred or tainted by too much botox and plastic surgery.

According to a recent WSJ article, “The Backlash to Botox”, April 6, 2007, with the advent of high definition and big screen televisions the search is on for people who are the real deal and look the part. The article notes, “The rarest commodity in TV these days, say veteran casting directors: stars without Restylane-frozen faces and collagen-inflated lips. Indeed, studios — scrambling to finish casting the 113 pilots slated to go into production this month for the fall season — say there’s a shortage of familiar faces that look their age.”

Hollywood producers know the believability of “the product” highly depends on many of the key ingredients, in this instance the actors and actresses. “We try very hard for authenticity,” says Marcia Shulman, Fox’s executive vice president of casting. “If you’re playing a mom you need to look like a mom. Otherwise it takes viewers completely out of the show.”

The article also notes, “A rival studio says it made an offer to a star this spring on the highly unusual condition that she “lays off the injectibles.”

So while consumers and business across the globe actively seek products and services that are scarce, special, real and valuable, it seems that Hollywood is no stranger to the pursuit of the authentic in the name of producing a more believable and watch-able product.

If you are an actor or actress in Hollywood, it must be hard to keep up with the Joneses. Plastic surgery, it seems, is one avenue to simply stay on par with the competition. However, as the article notes, with Hollywood casting agents scouring the globe for the untouched face, imitation and incrementalism are probably roads to a dead-end.

In this world there will always be a place for the “me-too” product or service. In fact, some people will get by and reap profits with a quick fix or a blatant imitation of a competitor’s product or strategy. Even the WSJ article says there’s still a demand for those actors and actresses with plump lips and stretched faces.

However, it takes guts to be true to yourself and your core business mission, and carve a special and differentiated niche in the market. The “pursuit of the authentic” is alive and well; just ask those in Hollywood whose phones are ringing much less frequently.

What are your thoughts on the pursuit of the authentic?

Do you have any pity for actors and actresses who feel the need to compete through plastic surgery and botox?

In a similar vein, how many companies attempt to compete through similar quick fixes and incremental value propositions?

Perusing the December 2006 issue of Harvard Business Review, I focused on a particular article, “Innovation through Design” by Roberto Verganti. In the article, Verganti discusses how Alessi, a northern-Italian home-furnishings manufacturer, has sold 1.5 million teakettles designed by American architect Michael Graves for a princely sum of $145 a piece.

Being the utilitarian that I am, I had a hard time believing someone would pay $145 for a tea kettle, especially since Target contracted with Graves to make a replica of the exact same kettle for a more reasonable price of $25! Yet, the $145 tea kettle continues to sell.

As I encountered and continued to park and amalgamate other examples in the dark recesses of my brain, I came to the following conclusion: most people are searching for authentic and are willing to pay any price to get it. I’ll define “the authentic” the following way, it’s a product, service or experience that is:

* Scarce: not easy to come by, you need to go out of your way to get “it”
* Special: unique and differentiated, you can’t find it anywhere else
* Valuable: as Warren Buffet would say, valuable not because of the dollars you pay, but for the value you get
* Real: the product, service or experience “speaks” to the core of who you are, your mission, your purpose

“The Authentic” is why people are willing to pay a premium for a unique teakettle, a scarce work of art, a great bowl of soup, or a spiced latte they can only get at their local coffee shop. Authenticity breeds passion and the examples of the authentic are endless.

The pursuit of the authentic then, for a marketer means:

* Incrementalism, or simply adding a few new features to an existing product or service, is the path to mediocrity
* Imitation, while “the highest form of flattery”, will always be challenged to measure up to the original
* Boldness, is taking a new direction, even when your customers of today are telling you they want more of the same

People are hungry for the authentic and are willing to pay any price. What are you doing to make your product/service/experience “the real deal”?